Most Health Plan Changes Not Negative for Workers

June
13, 2013 (PLANSPONSOR.com) – With health care reform looming, nearly half of
U.S. employers (45%) are considering making changes to their total rewards
programs or workforce strategies, shows a new survey.

According to the “2013 Towers Watson Talent Management and
Rewards Pulse Survey,” most employers do not anticipate changes that could
negatively affect a significant portion of employees, such as discontinuing
employer-sponsored health coverage, asking full-time workers to switch to part
time or increasing the use of contract workers.

The survey found that of those employers considering
making changes, nearly half (49%) either have redirected or are considering
redirecting rewards from one program to another, while 42% either have reduced
or are considering reducing subsidies for dependent health care coverage. More
than one-third (37%) either have reevaluated or are considering reevaluating
their employee value proposition to place more emphasis on variable pay.

“With some of the health care reform provisions going into
effect in early 2014, there remains little consensus among employers over what
actions they should be taking,” said Laura Sejen, global head of rewards at
Towers Watson. “Some employers are adopting a wait-and-see approach, but others
are considering changing their total rewards strategy or evaluating their mix
of rewards. And in rethinking the total rewards mix, companies are putting a
range of options on the table to keep costs down and avoid triggering the
excise tax in 2018.”

Even among organizations that are considering changing their
total rewards strategy or mix, the vast majority are less inclined to consider
changes that could negatively affect workers. For example, employers responded
that they:

Have not and are not considering asking current
full-time employees to change to part-time status (98%);

Have not and are not considering making greater use of
contract workers (95%); and

Have not and are not considering discontinuing
employer-sponsored health coverage for some or all active full-time employees
(89%).

“How an organization balances the mix of its total rewards
programs in response to health care reform will depend largely on its overall
business strategy as well as its employee value proposition. Some employers,
for example, will place greater emphasis on health care benefits, while others
will focus more of the total rewards package on base salary and incentives. And
while there are still many questions about the actions employers will take as
more of the health care provisions take effect, it’s clear that most employers
are hesitant to rush and implement changes that will negatively affect
workers,” said Sejen.

The survey was conducted in April and May of 2013. A total
of 113 organizations from the U.S., representing a cross section of industries,
participated in the survey.